Senior Portfolio Manager Rajesh Varma of DNCA Finance says Unilever plc (ADR) (NYSE:UL) is not just a developed market company, as 60% of its revenues come from emerging markets. As a result, the company is seeing approximately 6% growth each year.
A company that everyone should know is called Unilever. It’s an Anglo-Netherlands company. So it has dual listing in the U.K. and the Netherlands. People look and say, “Well, it’s a developed market company,” but it’s actually not, because 60% of its revenues come from emerging markets, and their goal is to have that at 70% by 2020. So for me, it’s a company that focuses on emerging markets.
And when you look at it, it’s got 5%, 6% growth every year. But you invest in it because you believe in emerging market consumption. That’s the reason you own it. And it continues to perform well. I mean, over the last six years, in U.S. dollar terms, it has provided annualized 10% return, which is pretty good. Ten percent annualized return over the last six years is pretty good, at least that’s how I feel. And I’m happy with that kind of return. That’s what I need. It’s good enough.
Mohannad Aama says his firm applies a fundamental approach to investing. Its primary product is a multi-asset, event-driven and opportunistic portfolio, and the main philosophy is value with a catalyst. He says the financial sector that is an example of the firm’s macro top-down style. Mr. Aama discusses how regulations in that sector may change with the new administration, as well as the potential increase in interest rates. He says these are catalysts for the financial sector in general.
Full interview available here.
Garrett Tripp discusses Braddock Financial LLC and the Braddock Multi-Strategy Income Fund. The fund invests in asset-backed securities and was converted to a public fund at the beginning of the year. Mr. Tripp primarily focuses on residential mortgage-backed securities, but he also invests in other sectors of the asset-backed securities market for diversification and to enhance the portfolio’s yield. The firm’s investment process is a fundamental, bottom-up strategy, which Mr. Tripp believes is one of its competitive advantages. The portfolio is generally comprised of approximately 100 holdings in order to remain diversified.
Full interview available here.
Richard Miller III uses a value philosophy to manage capital. The fund has a concentrated portfolio of value stocks constituting the long securities, and on top of that, Mr Miller aims to have the flexibility to allocate capital on the short side of the equation. He searches for great long and short ideas while executing a very patient capital allocation process.
Full interview available here.
Matt Hayner discusses Madison Investment Holdings, Inc. Madison’s large-cap strategy invests in growth at a reasonable price. Mr. Hayner currently has 27 names in the portfolio. When choosing holdings, Mr. Hayner looks for companies with competitive advantages, strong balance sheets, and sustainable and above-average earnings growth. Once he identifies a company that meets his criteria, he patiently waits for the market price to give him an opportunity to invest. According to Mr. Hayner, this strategy has outperformed through market cycles and with less risk than the overall market.
Full interview available here.
Portfolio Manager Matt Hayner of Madison Investment Holdings says Johnson & Johnson (NYSE:JNJ) should have continued stability despite Pfizer’s (NYSE:PFE) biosimilar launch.
Johnson & Johnson is a big health care conglomerate, if you will. They have a large pharmaceutical business that’s the most important and proportionally largest part of their income, also a really nice global consumer franchise and then lastly a medical device business. And their pharmaceutical business continues to do well. They’ve had well-above-average success with their business.
Their largest product actually is susceptible, and there will be a biosimilar launch here in November. Pfizer’s Celltrion business — it’s a division of Pfizer — is going to launch a biosimilar drug to Johnson & Johnson’s biggest drug, REMICADE. And so a lot of attention has been given that dynamic, and that will certainly be something that investors are watching. It could impact 2017.
We tend to be in the camp that it’s going to be relative stability for Johnson & Johnson, even if they do see some pressure from that biosimilar, because the rest of their portfolio is performing well and should make up any competitive pressure from that platform.
Rajesh Varma discusses his firm’s Global Fund. Mr. Varma says the philosophy of the fund is growth at a reasonable price. He looks for companies that have long-term secular growth, but he doesn’t want to pay high valuation. The focus is to look for companies that are global leaders. Mr Varma focuses on sectors where he can expect long-term secular growth, such as robotics, health care, emerging markets consumption, online security and instant commerce.
Full interview available here.
Nancy Prial and Saralyn Sacks discuss Essex Investment Management Company, LLC. In the small-cap and midcap space, Ms. Prial and Ms. Sacks believe investors often confuse volatility with investment risk. Rather, Ms. Prial and Ms. Sacks see these companies as being able to control their own destiny due to their size and agility. When choosing investments, Ms. Prial and Ms. Sacks look for companies with improving fundamentals and growth prospects that are not fully priced into the stock. They also dig in to learn what a company’s catalyst is for the improving fundamentals, how sustainable the change is and if it has a good management team. As growth investors, Ms. Prial and Ms. Sacks are currently finding opportunities in technology, health care and consumer.
Full interview available here.
Sven Thoren’s firm uses its experience in global equities to find names in the Nordic region in which they may go long or short. It is a deeply fundamentally driven strategy. Mr. Thoren talks about global trends as well as the impacts of the recent U.S. election and Brexit vote. He shares a few stocks he finds interesting at the moment.
Full interview available here.
Dr. Michael Yoshikami discusses his outlook on the current investment environment and what strategies to use given today’s conditions. Dr. Yoshikami says the main concerns are around interest rates, low GDP growth and the U.S. deficit. He says to combat these issues, investors should look for assets that are both capital appreciation-focused and have a dividend flow. He says it is important to diversify across the equity space and lean toward a more defensive posture.
Full interview available here.
